"I have taken the formal decision to resign. And I think it will be impossible for me to hold any official position in the new government. This is my personal view," Yanukovych said.

But he has not admitted defeat in the 26 December 2004 repeat election, won by a large margin by opposition leader Viktor Yushchenko. Yanukovych said he would continue to challenge the election result, but he said he held out little hope of succeeding.

"I will remain in politics, and will act as an independent politician who legitimately won the elections on 21 November. My team and I will participate, in a legitimate and proper way, in both political and civil activity," Yanukovych said.

In a later televised address, outgoing President Leonid Kuchma said Ukraine would have a new president in 2005 and that all Ukrainians "must accept this democratic choice as their own."

New Year's Festivities

Meanwhile, President-elect Yushchenko and Georgian President Mikheil Saakashvili celebrated New Year's together on Kyiv's Independence Square. Some 100,000 people joined in the festivities.

Saakashvili, who came to power in the Rose Revolution in November 2003, told the crowd Yushchenko's eventual victory in Ukraine's presidential election was "a triumph of good over evil."

Ukraine's voters went to the polls three times to vote for president. Yushchenko's opponent, Prime Minister Viktor Yanukovych, was declared the winner after the second round of voting in late November, but those results were nullified due to election violations.